A few years ago we might have assumed that the Revolut IPO would happen in London. It's a British company that built its business here, so why wouldn't it? London was one of the major global stock markets and a natural home for a fast-growing company. Sadly, that is no longer true.
Revolut confirmed last week that it was exploring a “dual listing” IPO, split between the Nasdaq stock exchange in New York and the London Stock Exchange. It is a measure of how far the City has fallen that it will come as a relief to those working in British finance that London is being considered at all.
Back in 2024, CEO Nikolay Storonsky dismissed a London listing as “not rational”, citing the lack of liquidity and the 0.5% stamp duty on every trade as reasons why only New York would make sense. He has now softened that view, suggesting a dual listing between the two cities, even if New York is the senior of the pair. It's better than nothing.
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Revolut is a prize worth having. It is one of a handful of genuine successes the British economy has managed to create in the last decade. Its latest results reported $6 billion in revenues and more than $2 billion in profits. It has more than 75 million customers worldwide and has established itself as a leading brand in digital finance. It has a robust business model, at least for what is still basically a bank, with subscription and trading fees, instead of far-riskier loans, accounting for the bulk of its revenues. It is already valued at $115 billion and for an IPO it may well target significantly more than that. Indeed, if it is listed in London, Revolut is likely to be bigger than BP, GSK or Unilever, taking its place at the very top of the FTSE 100.
It could also start to change perceptions. London has turned into a global backwater. In 2024, it had fewer IPOs than Malaysia or Oman. Companies keep leaving the market and there is almost nothing coming through to replace them. In the first half of this year there were only seven new listings, raising less than £600 million between them. Meanwhile, the major companies that are still listed here are mostly a collection of banks, oil giants, and pharmaceutical conglomerates, which are hardly likely to set any pulses racing.
How the government can make the Revolut IPO a success
Revolut will be very different. It is a tech company, is expanding rapidly and has a well-known brand. If it is listed in London, global investors might be willing to take a look at the wider market again. But it will only make a difference if the float goes well. What can be done to make it a success? The chancellor has already suspended stamp duty for the Revolut IPO and for the first three years of trading as well, and that may well have helped sway Revolut's decision. That will give a huge boost to trading and liquidity. Without it anyone with any sense would simply buy the shares in New York, where they are tax free. But why not extend the period to ten years, perhaps as a prelude to abolishing the tax entirely?
At the same time, why not offer investors in the Revolut IPO an exemption from capital-gains tax? That would build a base of “buy and hold” investors that would give the company a great platform. And perhaps add an extra IPO allowance of £5,000 to existing ISAs to tempt small investors into the new-issue market. It would all make the London listing more attractive and persuade companies the City was as good as, if not even better than, New York. A Revolut IPO in the next year or so may well be the last chance to prove that the City still matters.
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